The recent decision by the High Court in Mohamed v Barnet LBS  EWHC 1012 (QB) considers the security of tenure which an occupant of short-term accommodation let by a local authority may have.
The case confirmed that the appellant (Mohamed) did not have security of tenure in the temporary accommodation she was occupying.
The landlord, the London Borough of Barnet, housed Ms Mohamed together with her daughter. Although Mohamed (M) was found intentionally homeless, she was granted a licence to occupy the property pursuant to the Local Authority’s duties under the Children Act. She was placed in temporary accommodation with a nightly accommodation charge. The agreement did not stipulate a relationship of landlord and tenant between the Local Authority and M. Subsequently, Barnet served a notice to quit.
M claimed security of tenure under the Housing Act 1985 on the basis that the conditions in Section 79 were satisfied (i.e. it was a tenancy or licence of a property let as a separate dwelling where the landlord is a local authority and the tenant is an individual occupying the property as his or her only or principal home).
However, Section 79 is subject to a number of exceptions set out in Schedule 1, and here the question was whether paragraph 6b of Schedule 1 applied. This prevents a licence or tenancy being secure if the house is leased to the local authority by a private sector landlord and the terms allow the landlord to recover possession on the expiry of a specified period or when required. The purpose of this provision is to ensure that the private landlord is able to recover the property without finding a tenant or licensee with security of tenure in situ, and avoiding the local authority being in breach of its obligation to return the property with vacant possession (and so encouraging these arrangements to ensure a supply of properties).
The court looked at this as a preliminary issue. The judge at first instance found that M’s occupation was not secure, on the basis that the private landlord was entitled to recover possession when required. M appealed.
The High Court dismissed the appeal, following the case of Tower Hamlets v Abdi (1993), and refusing to agree to take the approach which M had sought of following the decision in Hickey v Haringey LBC (2006) EWCA Civ 373 which held that a lease which allowed the landlord to recover possession at the end of its term but not before did not fall within the paragraph.
In M’s case, the arrangement between the Local Authority and the private sector landlord was for an initial fixed term, followed by occupation on a monthly periodic basis. By the time M took up occupation, the agreement had entered the periodic phase. That brought it within the scope of the decision in Abdi. This meant that the clause allowing for termination on 14 days’ notice was sufficient to satisfy paragraph 6b and that M’s occupation agreement had no security of tenure.
This decision is being appealed to the Court of Appeal, and so the final outcome is awaited. The case emphasises the importance of good drafting of the agreement between the private sector landlord and the local authority. It does not apply to a private registered provider or a registered social landlord who leases properties from the private sector for similar purposes as the Housing Act 1985 does not apply. Instead, the question for those landlords will often be whether the occupant truly has a licence or an assured shorthold tenancy.
However, the Renting Homes (Wales) Act 2016 contains no provision equivalent to paragraph 6b, and so both local authorities and registered social landlords in Wales will need to review the arrangements they have with private sector landlords to ensure that they do not risk being in breach of their obligations to deliver vacant possession at the end of the lease once the 2016 Act comes into force.